Directors, Commissioners & Shareholders Meeting

Directors, Commissioners & Shareholders Meeting 

Indonesian corporate structure is different from the 

common law system, since it adopts a two-tier management 

structure instead of a single-tier management. The management 

structure comprises of Board of Directors  (“BOD- Direksi”) and 

Board of Commisioners  (“BOC-Dewan Komisaris”). Senior 

officers are responsible for the company’s actual management in the 

operational sense is the Direksi. Even though there is one director, 

there is usually more than one. The basic functions of the Direksi 

are to manage and represent the company, and not the shareholders. 

The second tier is Komisaris (“Commisioner”), which has the role 

of supervising and advising the  Direksi, and representing the 

interests of the company and not merely the interest of the 

shareholders. The requirement of  a company to have a BOC is a 

significant alteration from the old provision (the Code). To date, all 

public companies, companies in  the business of mobilizing funds 

from the public or companies that issue debt instruments must have 

at least two directors and two commissioners. The UUPT also 

distinguishes between the collegial nature of the BOD and the non-

collegial nature of the BOC. Where a company has more than one 

commissioner, the BOC constitutes a council pursuant to the 

Elucidation that no individual  commissioner can represent the 

company if there is more than one commissioner. In contrast, when 

a company has more than one director, each director has the 

individual authority to represent the company unless the company’s 

articles of association states  otherwise. Although the primary 

responsibility of managing the company rests on the directors, in 

some circumstances, commissioners can exert certain managerial 

powers -provided by the company’s articles of association or the 

GMS- for instance managing the company for a specific time 

period. Both director and commissioner bear personal liability for

any fault or negligence committed in discharging his/her task. 

Although the UUPT does not define “fault” or “negligence”, it does 

however acknowledge the concepts of fiduciary duties. In case of 

breaching any fiduciary duties, shareholders who control at least ten 

percent of the issued shares with valid voting rights may, in the 

name of the company, bring a cause of action against the director or 

commissioner for the loss suffered by the company. Since the 

shareholder initiates the legal action in the name of the company, it 

can be considered derivative action.   

Pursuant to the UUPT, the shareholders of an Indonesian 

company are acting via GMS. The GMS has various rights, some of 

which cannot be waived under any circumstances i.e. the right to 

approve amendments of the company’s Articles of Association and 

to approve a dissolution or winding up of the company, while the 

rest may be modified in the company’s Articles of Association. 

There are two types of GMS: annual and extraordinary meetings. 

An annual GMS is held within the last six months of the company’s 

fiscal year. The GMS convenes in order to approve the annual 

report, including its annual accounts that must comply with 

Indonesian Financial Accounting Standards and the signatures of 

the directors and commissioners required for the annual accounts. 

The extraordinary GMS can be  convened at any time that the 

company deems necessary for the purposes stipulated in the UUPT 

or Articles of Association. In other word, a company shall 

undertake an extraordinary GMS for the purposes other than 

approving the company’s annual account, such as: merges, 

acquisitions or appointment of a new Direksi. Commissioner, 

Director or a party that controls  at least 10% of the issued shares 

may request the meeting.

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